To buy, short, or sell? Icahn is a tiny player!! The objective truth.
SHORT SQUEEZE after an average quarter [and the Icahn factor]!!! You never want to buy stocks after a major short squeeze!!! How long do stocks stay up after a short squeeze occurs? Not very long, just wait as demand for stock goes down, shorts will come back in, and the smart money is going to take profit so their investors will be happy. Icahn's goal was to sell Netflix to another company. Guess what? Too late, stock has already gone up over 300% in one year, 67% of that in the last week. Why is it too expensive to buy? Well, because the average price to sales of the entire cable tv industry is 1.48. Heck, time warner cable is 1.45. NFLX is at 2.60 and their margins are horrible and they are going to get worse because of high upfront cost to transition to streaming. They have major headwind since they are now trying to become a cable company and play with the big boys. Their current PE ratio is 143 [next year expected to be 60], their revenue is only growing at a 15% clip. Negative cashflow, stock dilution, and high debt. My friends, no company in the right mind is going to buy this company right now at these prices! Their product isn't unique, just like Apple phones aren't unique anymore. A smart investor isn't going to spend a dime on this stock until it gets down to $100 to $120 per share, if not lower.. If someone was going to buy the company, it would have been when it was at $60 range [with no poison pill in place] and some company would have paid $100 to $120 per share for it. Icahn already made his money folks. What do you think, that Icahn is some magician? No, he has to take his profits and will do so!! Don't you think he's hedging his bet with massive put options and short positions? So eventhough he's not going to sell his stake in the company right now, he's not going to lose money when it goes down... Then once the shares get crushed, he will make real money when some company makes a bid. Have you seen Navistar? Since he purchased shares, that company has gone down from $40 to $19 to $26. How about his Blockbuster investment that he made, that company went bankrupt?